There’s been a lot of talk over the last few weeks about how many buyers out there are actually going to feel the sting of the new mortgage rules that came into effect on July 9th. While the media has been playing up the severity of the implications these new rules bring, most industry insiders feel that only a relative minority of purchasers will actually have their buying power significantly reduced.

I thought it might be a good idea to shed some light from a realtor’s perspective and take a look at a couple of real world examples.

Example #1

A client of mine was previously looking to purchase a one-bedroom condo in the King West area for somewhere in the $325,000 - $330,000 range. With the new rules in place, he’s been bumped down to well under $300K. This means he’s likely going to have to say goodbye to a separate bedroom and settle for a bachelor suite. Now he’s wondering if renting might be a better option...

Example #2

Some clients of mine were previously looking to purchase a 3-bedroom, 2 bathroom home in the east-end for around $600,000. With the new rules in place, they’ll likely have to take on a basement tenant if they want to continue shopping for a house in the same price range. This means that they may have to settle for only one bathroom, since 2nd bathrooms in these homes are almost always located in the basement.

So, there you go - two real world illustrations of how Flaherty's tightening measures are affecting purchasers in the Toronto real estate market.

I will note that, aside from these two buyers, none of my other clients have been noticeably affected by the new mortgage rules. They're either purchasing with at least 20% down or they're planning on spending conservatively less than the amount they've been approved for.

What about you? Have you had to reassess your home buying plans as a result of the new mortgage rules?

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